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Language center & Catering biz

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YOUR GUIDE TO STARTING AN ENGLISH TRAINING CENTER
The business process outsourcing industry is increasing 100 percent yearly, so expect the same exponential growth for English training centers
By Katrina Tan

Instead of using their time and resources to train potential employees on English proficiency, the country’s business process outsourcers (BPOs)--call centers and medical transcription firms particularly--are subcontracting the task to English training centers.

These centers exist primarily to teach individuals to communicate effectively with foreign clients. Trainings range from English communication skills, speaking and pronunciation, and idiomatic expressions, to basic information technology skills and familiarization with a client’s culture. In spite of the extensive coverage, however, the courses are fairly short, lasting from three weeks to a few months.

Now, why would the Philippines--the world’s third largest English-speaking country--need English training centers? “The pervasive influence of Taglish shows in mainstream media, the de-emphasis of English as the medium of instruction two decades ago, and the tendency of teachers to shift between English and Filipino has resulted in graduates proficient in neither language. There’s also a negative social stigma that one is being elitist when speaking in straight English,” says Jo-Anne Loquellano, Promoting English Proficiency (PEP) project director.

The recent Social Weather Stations survey results bear this out. There has been a 22-percent decline in the number of English speakers in the last six years, with the number dropping from 54 percent in September 2000 to 32 percent in March 2006. The Department of Education further verifies that less than seven percent of high school graduates master English well enough to enter college, while out of the 90 percent of college graduates that can speak English, only a small fraction speaks the level required to become call center agents, says Mitch Locsin, executive director of the Business Process Association of the Philippines (BPA/P).

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In fact, out of all the job applicants in the BPO industry, only a scant three percent are hired. Another five to 10 percent fall under the “near-hire” category--those who fall just a bit short of being hired--with their English oral communication skills being the major setback. What’s more alarming is that should things continue as they are, the BPO industry may suffer a shortage of 273,000 positions from 2006 to 2010, according to Damian Mapa, commissioner of the Commission on Information and Communications Technology (CICT).

“Regional accents are not the problem because this is relatively easy to correct,” says Bambina Buenaventura, director of the Test of English for International Communications (TEIC). “The problem is that 95 percent of the applicants have difficulty both in understanding what is asked, and in communicating the answer if they understood the question.” Locsin also agrees that the overseas communication process is slowed down because Filipinos still need to translate the conversation from English to Filipino and vice-versa.

Out of this situation came the idea for English training centers. The first few English training centers were established in early 2005, with contact center applicants and near-hires as their primary target market. Nowadays, the BPOs themselves are contracting the English training centers.

To gain clients, these centers do not go the traditional advertising route. They simply offer their services to the BPO, which then sends someone to check the center’s performance and curriculum. If the BPO opts to avail of a center’s services, the two parties will meet to discuss details.

A BPO may require as many as 10 to 12 centers to service its projects. The courses can be custom made for any position, whether it be for agents, managers, or supervisors, and include different skills sets. FuturePerfect Business English Specialists, Inc., for instance, offers several sets--the Call Center Communications Skills (CCCS) program, Foundations in Speaking, and even Certificates in Teaching Workplace English (CTWE).

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Courses are priced according to the duration, with the basic CCCS program going for P4,950 for 25 hours, P8,500 for P50 hours, and P12,500 for 75 hours. FuturePerfect’s programs can also be customized depending on the client’s needs.

Another payment scheme is via the number of successful hires. For example, the BPO will pay the center P15,000 for each hired contact center agent that underwent training, and between P30,000 and P40,000 per hired medical transcriber.

“A training center should have a successful hiring rate of at least 50 percent to be competitive--some are even as high as 70 to 90 percent,” says Locsin. “Within your company, trainers are probably the most important determinant as to how many of your trainees get hired. Therefore, it is crucial to hire the ones that are certified and experienced.” With the shortage of qualified trainers, however, expect to pay each a starting monthly salary of about P30,000 to P40,000 to prevent poaching.

Another crucial component is the English training center’s curriculum. A basic 100-hour training curriculum and set of modules that come with equipment requirements and other guidelines can be obtained from the Technical Education and Skills Development Authority (TESDA). But most established centers prefer to administer their own language assessments and customized courses according to the client’s needs. And to enhance their curriculum, centers include computer-aided training, audiovisual aids, and diagnostic testing materials in their programs.

FuturePerfect has even created its own Business Processing Language Assessment Scales (BUPLAS) which it uses during recruitment, training, quality scoring, and language audits. BUPLAS has helped FuturePerfect design more effective curriculum and training programs for clients such as AIG-BPSI, Convergys (Alabang), PeopleSupport, and SPi.

There are a number of big players in the English training center industry. Among them are Teledevelopment Philippines, the Call Center Academy of the Philippines, John Clements Consultants, Inc., Sutherland Global Services, and Sykes Enterprises, Inc. Sutherland and Sykes are global companies that grew rapidly after migrating to the Philippines. Sutherland, for instance, entered the Philippine market in mid-2005 with 500 employees. It now counts 750 employees, and looks to double this number in six months.

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On the flip side, starting small, with one to two classrooms accommodating 30 students each, is fine for those interested in this business. This will require roughly P500,000 for rent, classroom equipment, computers, books on English language teaching (especially grammar, pronunciation, and writing), tape recorders, and anything else that will help students understand the English-speaking culture. Make sure that the materials you buy are adaptable to students of different levels, and work in large and small class situations.

Teaching a different culture requires a bit more hands-on treatment than other regular classes, so you may want to employ a few assistant teachers and administrative staff depending on the number of students you have. Even at a conservative 50 percent hiring rate, the center will still earn a gross monthly profit of aboutP225,000. But since you are going to acquire all the basic equipment for the center, you may want to increase the number of classes or divide them into morning and afternoon sessions to increase revenue. Two full classrooms, or a total enrollment of 60 trainees per term, should be enough to cover costs.

The biggest basic costs are covered during the start-up phase. But to be competitive, training centers must keep abreast of changes in the English language by revising their curriculum every year or two. Profit margins are high--about 40 to 50 percent--so expect to break even in one to two years.


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